PETALING JAYA: When it comes to stock trading, it always helps if the company that you have invested in suddenly announces it has been awarded a juicy contract within a mega infrastructure project. That is exactly what happened to some happy shareholders of renewable energy specialist Reneuco Bhd.
The relatively obscure company’s share price rocketed by as much as 25.5% yesterday on news it had been given the nod, together with its consortium partner Citaglobal Bhd, to be the independent power producer (IPP) for the RM75 billion East Coast Rail Link (ECRL).
The coast-to-coast rail line is possibly the country’s biggest ever infrastructure project.
Centre of attention
After Wednesday’s announcement that they had won the tender, the two mid-sized companies captured the attention of many investors, catapulting them to the top 10 most active counters list on the local bourse.
Reneuco was the second most traded stock yesterday with 70.7 million exchanging hands, while Citaglobal was in fourth spot with 54.2 million shares traded.
At yesterday’s close, shares in Reneuco (formerly known as KPower Bhd) were up 4.5 sen or 17.65% to 30 sen, giving it a market capitalisation of RM159.7 million. Its intraday high was 33 sen.
However, Citaglobal’s price movement was much less spectacular, ending the day up half-a-sen or 1.72% higher to 29.5 sen, giving it a market capitalisation of RM544 million.
In a filing with Bursa Malaysia on Wednesday, Reneuco said it had entered into a 50:50 joint venture consortium with Citaglobal (formerly known as WZ Satu Bhd) for the job.
Established in 1973, Reneuco started out as a textile manufacturer. In 2013, the company acquired a freehold student accommodation building in Liverpool, UK, and by 2020, had diversified to construction-related activities. Today, it operates in the sustainable energy and utilities segment, specialising in renewable energy.
Citaglobal was listed on Bursa Malaysia in 2008 under the name of Weng Zeng Resources Bhd. In 2019, the international trade and industry recognised the company as a Bumiputera- controlled public-listed company. Their present businesses include civil engineering and construction, oil and gas, and manufacturing.
The two companies had received and accepted a letter of intent (LOI) from Malaysia Rail Link Sdn Bhd (MRL) to be the IPP to supply green hybrid power, communication utility, information and communication technology for the ECRL.
The consortium’s proposal also included power supply to commercial/industrial parks along the railway’s alignment.
‘Greening’ the ECRL
Reneuco executive chairman and major shareholder Mustakim Mat Nun said this contract will show the new partnership’s ability and commitment to “accelerate sustainable living and green mobility” along the ECRL alignment.
“With Reneuco and Citaglobal’s track record in our respective industries, we are well positioned to leverage and execute this large scale IPP,” he said in a statement.
The ECRL is 640km-long, connecting parts of the east coast to the west. State capitals, major urban centres, industrial hubs, ports, airports and tourism zones will all be connected to this railway.
MRL, wholly owned by the finance ministry, will be developing the project and will operate it on a 50:50 joint venture basis with China Communications Construction Company (CCCC).
The transport ministry, through Agency Pengangkutan Alam Darat, will be the supervisor and regulator for the project. - FMT
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